A fall in the pace at which food prices are rising in Britain helped to temper Consumer Price Inflation in May which remained unchanged from the previous month at 8.7%. Andy Rain/EPA-EFE
June 21 (UPI) -- The pace at which prices rose in Britain remained unchanged in May for the second straight month due to rising costs for air travel, recreational and cultural goods and services, the latest official figures out Wednesday show.
The annual Consumer Price Index rose by 8.7% in the 12 months to May, unchanged from April, but critical core inflation -- which strips out volatile energy, food, alcohol and tobacco prices -- jumped by 0.3% to 7.1%, its highest level in 31 years, according to the bulletin from the Office for National Statistics.
The strong contribution to CPI from recreational goods -- which surged to 6.7% from 6.3% in April -- was driven by admission fees to live music events, computer games and package holidays.
Services inflation surged 0.5% amid rises seen across the board with health and communication inflation seeing the sharpest increases, jumping by more than 1% each. Clothing and footwear inflation also gathered pace but double-digit overall goods inflation fell to 9.7%, thanks to inflation across a number of categories either falling back or holding steady.
Inflation-driving price rises were offset by a slowdown in gasoline and food inflation, which dropped to 18.4% from 19.1% in April, and transport which fell to 1.2% from 1.5% in April.
The ONS said that although inflation had fallen in April to 8.7% from 10.1% in March, it remained at "a historically high level."
"The cost of airfares rose by more than a year ago and is at a higher level than usual for May," said ONS Chief Economist Grant Fitzner. "Rising prices for second-hand cars, live music events and computer games contributed to inflation remaining high.
"These were offset by a fall in the price of petrol. Food price inflation remains high, but the rate has eased slightly this month with costs rising more slowly than this time last year."
Ahead of a meeting of the Bank of England's monetary policy committee Thursday which is likely to see it hike interest rates a 13th consecutive time from 4.5% to 4.75%, or more, as it battles to bring inflation down, Chancellor Jeremy Hunt pledged to stay the course.
"Inflation is the most invidious tax rise the British people are facing. If we are going to help families, mortgage holders and businesses, we need to stick to the plan to bring down inflation -- no matter what," Hunt said in a Twitter post.
"We won't be pushed off course."
But opposition Labor's shadow chancellor Rachel Reeves said inflation stuck at 8.7% was "really worrying news," with food prices in Britain increasing at a quicker pace than other G7 countries.
Analysis by the party showed that food prices were rising 20% faster than in France, 30% faster than in Germany and at triple the rate in the United States, Reeves said in a post on Twitter.
"That difference is leaving Brits paying over $1,270 a year more for food. This government can't get a grip of this problem because they are the problem. Thirteen years of the Tories and their disastrous mini-Budget are damaging economic security and leaving families worse off."
